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11 - City Depository 2023-25Item No. 11 Memorandum TO: Mayor, Mayor Pro -Tem, & City Council Grayson Path, City Manager FROM: Gene Anderson, Finance Director SUBJECT: CITY DEPOSITORY 2023-25 DATE: February 27, 2023 BACKGROUND: Under Chapters 105 and 131 of the Local Government Code, the City of Paris may receive bids from financial institutions to serve as the depository and custodian of City funds. The City has historically operated under two year agreements. The current depository agreement expires February 28, 2023. STATUS OF ISSUE: The City advertised in the Paris News on January 24th and 31 st of 2023 that it would receive bids to serve as the City's depository bank for a two year period beginning March 1, 2023 and ending February 28, 2025. In addition, email notification was sent to local banks who have expressed interest in the past. Requests for additional information were received from two banks. Liberty National Bank and Farmers Bank & Trust submitted bids. Liberty Bank's bid is the most favorable to the City. BUDGET: Not affected by this selection. RECOMMENDATION: Motion to select Liberty National Bank to serve as the City of Paris depository bank for the period March 1, 2023 through February 28, 2025. Depository Bids 2023 Bid Comparison The remaining terms of the contract are the same for both banks. Liberty Farmers CD Rates: ..._......._ ..._.. .............. CDs less than $100,000 Basis Points Basis Points 7-13 days T- Bill Rate Plus 0 Minus 80 14-29 days T- Bill Rate Plus 0 Minus 70 30-59 days T- Bill Rate Plus 0 Minus 60 60-89 days T- Bill Rate Plus 10 Minus 50 90-179 days T- Bill Rate Plus 20 Minus 50 180-365 days T- Bill Rate Plus 30 Minus 50 CDs more than $100,000 7-13 days T- Bill Rate Plus 0 Minus 80 14-29 days T- Bill Rate Plus 0 Minus 70 30-59 days T- Bill Rate Plus 0 Minus 60 60-89 days T- Bill Rate Plus 15 Minus 50 90-179 days T- Bill Rate Plus 25 Minus 50 180-365 days T- Bill Rate Plus 35 Minus 50 No floor on rate 2% floor No ceiling on rate 4.75% ceiling Consolidated Cash Account Rate T -Bill plus 10 basis pts. T -Bill minus 50 basis pts. No floor on rate 1.5% floor No ceiling on rate 4.00% ceiling The remaining terms of the contract are the same for both banks. NOTICE TO BANDING INSTITUTIONS WITHIN THE CITY OF PARIS Notice is hereby given that Governing Body of the City of Paris, subject to the provision of Chapters 105 and 131 of the Texas Local Government Code, will receive bids and applications from all interested banking institutions within the City of Paris to serve as prime depository of the City of Paris and maintain custody of the funds of the City for a period of two years from March 1, 2023 through February 28, 2025. Any such application shall be delivered to the office of the City Manager located in City Hall prior to 3:00 P. M., Monday February 20, 2023, The City will accept bids only on the basis herein after described. It is required that each bank bid by filling in all blanks and agreeing to the following specifications: Bank will pay to City interest on time deposits in accordance with the following schedule: MATURITY CERTIFICATES OF DEPOSIT UNDER $100,000 RATE 7-13 days T-bill plus or minus 0 basis points 14-29 days T-bill plus or minus _0 basis points 30-59 days T-bill plus or minus _0_ _0_ basis points 60-89 days T-bill plus _10_ basis points. 90-179 days T-bill plus basis points 180-365 days T-bill plus _20_ _30_ basis points CERTIFICATES OF DEPOSIT OVER $100,000 7-13 days T-bill plus or minus 0 basis points 14-29 days T-bill plus or minus _0_ basis points 30-59 days T-bill plus or minus 0 __ basis points 60-89 days T-bill plus _15_ basis points 90-179 days T-bill plus basis points 180-365 days T-bill plus _25_ T35_ basis points The Wall Street Journal publishes the 26 week treasury -bill yield based on the results of the most recent treasury -bill auction. Rates for certificates of deposit under this contract must be tied to this 26 week treasury -bill yield. The rates should be quoted either plus or minus a given number of basis points from this 26 week treasury -bill yield. Please provide an explanation of how the interest rate for the City's Consolidated Cash account will be determined. All investment services offered to other bank customers will be available to the City. CHARGES List below any service charges that will be levied against the City:. None In addition to the normal services and supplies furnished by the depository bank, the following services are standard and common to most depository contracts. They are to be furnished to the City at no charge: deposit slips one large safe deposit box coin wrappers night depository service including bags and keys cashier's checks stop payment orders wire services checking and savings accounts all bank accounts will be interest bearing accounts on line banking overdraft protection Bidders are requested to submit a list of any further concessions or services in the space provided below which they may want to offer to the City of Paris and make any comment as further consideration in selecting the City's depository. If needed, please add additional pages. The Bank will pay interest on the City's Consolidated Cash Account at a rate equivalent to the auction rate for 26 -week Treasury Bills plus 10 basis points. The rate will be changed each calendar quarter and will be calculated using the most recent Treasury Bill auction. Using the most recent Treasury Bill auction, a rate of 4.76% would result. The Bank will originate the City's ACH payments, both debits & credits, without charge. The Bank will furnish the City, without charge at the end of each year, a disk containing a summary of each transaction account activity, All monies which are deposited into the depository under the provisions of this proposal shall be continuously secured, in accordance with the laws of the State of Texas applicable thereto, by a valid pledge of par, exclusive of accrued interest, at all times at least equal to 102% of the amount of money on deposit in said several funds on deposit in the depository. In addition, the depository agrees to meet the same security pledge for all funds on deposit by the Paris Economic Development Corporation. All time deposits or certificates of deposits which have not elapsed on the termination date of the finally approved depository contract, shall remain on deposit with the same depository under the same terms and conditions in effect during said contract until the date such time deposits have elapsed. Funds from Bond sales may be deposited in the City depository or placed in outside investments. The City of Paris reserves the right to accept or reject any or all bids, to waive formalities, and to accept the bid the City considers the most advantageous. The City also reserves the right to place or invest part or all of its surplus or excess funds outside the designated depository, in any manner permitted by law, from time to time throughout the term of the contract. The undersigned bank official represents that he is authorized by the Bank's Board of Directors to sign this document and legally obligate the Bank to the terms stated in this agreement. NAME OF BANK Liberty National Bank in Pa, Vls ......... ..... ........ i BY: Bill Coleman TITLE: President DATE: �`� �, wm :�� „� .., -------� ��� = m. �...._ a RESPONSE TO DEPOSITORY RFA FOR CITY OF PARIS FEBRUARY20, 2023 1lPage FARMIIIE,RS February 20, 2023 City of Paris 135 SE 1St Street Paris, Texas 75460 Re: response city depository RFA Dear Mr. Path, We would like to take the opportunity to thank you for considering Farmers Bank & Trust for your financial services. At Farmers Bank & Trust, we believe in putting you first. Our select and qualified staff has extensive banking experience with a strong focus in business banking and public fund management. Chartered in 1906 in Magnolia, Arkansas, Farmers Bank & Trust began as a $75,000 bank. Today, our assets reach over $2.4 billion. We serve our customers through 32 banking locations in over 22 communities. We are committed to the growth and development of our community and are strong advocates of the people, organizations, and partnerships that make Lamar County a great place to live and work. Please review the following pages which detail our depository and Treasury Management proposal. This proposal is valid for 180 days from today's date (February 20, 2023). Again, we sincerely appreciate the opportunity to share with you what Famers Bank & Trust has to offer. It is our sincere hope that we can build a strong and long-lasting relationship with each of you. You'll see that to us, you're family. Please do not hesitate to contact me if you have any questions or need more information. I can be reached at 903-495-7999. Sincerely, 111011111114; /2 �""' �Ll Erik Roddy Market President 2 1 P a g e NOTICE TO BANKING INSTITUTIONS WITHIN THE CITY OF PARIS Notice is hereby given that Governing Body of the City of Paris, subject to the provision of Chapters 105 and 131 of the Texas Local Government Code, will receive bids and applications from all interested banking institutions within the City of Paris to serve as prime depository of the City of Paris and maintain custody of the funds of the City for a period of two years from March 1, 2023 through February 28, 2025. Any such application shall be delivered to the office of the City Manager located in City Hall prior to 3:00 P. M., Monday February 20, 2023. The City will accept bids only on the basis herein after described. It is required that each bank bid by filling in all blanks and agreeing to the following specifications: Bank will pay to City interest on time deposits in accordance with the following schedule: CERTIFICATES OF DEPOSIT UNDER $100,000 MATURITY RATE 7-13 days T-bill plus or minus 80 basis points 14-29 days T-bill plus or minus 70 basis points 30-59 days T-bill plus or minus 60 basis points 60-89 days T-bill plus or minus 50 basis points 90-179 days T-bill plus or minus 50 basis points 180-365 days T-bill plus or minus 50 basis points *Cert fcates of deposit shall have a rate floor of 2.00% APR and a rate ceiling of 4.75% APR CERTIFICATES OF DEPOSIT OVER $100,000 7-13 days T-bill plus or minus 80 basis points 14-29 days T-bill plus or minus 70 basis points 30-59 days T-bill plus or minus 60 basis points 60-89 days T-bill plus or minus 50 basis points 90-179 days T-bill plus or minus 50 basis points 180-365 days T-bill plus or minus 50 basis points *Certificates of deposit shall have a rate floor of 2.00% APR and a rate ceiling of 4.75% APR The Wall Street Journal publishes the 26 week treasury -bill yield based on the results of the most recent treasury -bill auction. Rates for certificates of deposit under this contract must be tied to this 26 week treasury -bill yield. The rates should be quoted either plus or minus a given number of basis points from this 26 week treasury -bill yield. Farmers Bank & Trust agrees to provide Certificate of Deposit rates based on the 26 week Treasury Bill asked rate (as quoted in the Wall Street Journal) on the date of investment with rate remaining fixed for said term. 3 1 P a g e Please provide an explanation of how the interest rate for the City's Consolidated Cash account will be determined. Farmers Bank & Trust shall provide an interest rate equal to the 13 week Treasury Bill asked rate (as quoted in the Wall Street Journal) minus 50 basis points effective on the first business day of each month for the City's Consolidated Cash account. This account shall have a rate floor of 1.50% APR and a ceiling rate of 4.00% APR Interest will be accrued daily based on the account's ledger balance and will be credited to the sweep account on the first business day of each month for the prior period As of February 1 S, 2023, the 13 week Treasury Bill rate is 4.64%, therefore the effective rate for the City would be 4.00% APR. All investment services offered to other bank customers will be available to the City, Acknowledged. Bidders are requested to submit a list of any further concessions or services in the space provided below which they may want to offer to the City of Paris and make any comment as further consideration in selecting the City's depository. If needed, please add additional pages. Executive Summary ✓ Farmers Bank & Trust would like to extend the offer to WAIVE all service fees for the City of Paris. Waiver would include all account related fees as well as any Treasury Services utilized by the City. ✓ Farmers Bank & Trust would like to offer an interest rate for the Consolidated Cash Account that is equal to the 13 week Treasury Bill asked rate (as quoted in the Wall Street Journal) minus 50 basis points effective on the first business day of each month. This account shall have a rate floor of 1.50% APR and a ceiling rate of 4.00% APR. As of February 1 S, 2023 the 13 week Treasury Bill rate is 4.64%, therefore the effective rate for the City would be 4.00% APR. ✓ Farmers Bank & Trust would like to recommend our Insured Cash Sweep for all funds held in checking, savings, and/or money market accounts. ICS provides 100% FDIC insurance for funds up to $100 million per depositor and is an accepted form of collateral in accordance with state requirements. Certificates of Deposits shall be secured by Federal Home Loan Bank Letters of Credit. Monthly statements will be provided for all collateral types. ✓ Farmers Bank & Trust provides a full suite of Treasury Services available to the City including but not limited to Cash Management, ACH origination (direct depositldrafts), wire origination, Remote Deposit Capture, Positive Pay, ACH Protection, and business credit cards. ✓ Farmers Bank & Trust will provide a local and skilled support team dedicated to meeting the daily operational needs of the City: Erik Roddy, Market President • � ��d(b„ji n , .903-495-7999 office; 903-795-6909 cell ....�.... + Erik has been with Farmers Bank & Trust for 2 years, serving as Market President and Commercial Lender. He has 19 years of banking experience. 4 1 P a g e Leigh A. Cheek, Senior Vice President of Treasury Services 903-255-1803 office; 903-701-4457 cell • Leigh has 25 years of commercial banking experience 20 of which have been spent in Treasury Management. Leigh joined Farmers Bank & Trust in March 2012 and began the Treasury Management department for the bank. Leigh has a strong background in Treasury Management, commercial banking, and public fund management. Whitney Boykin, Treasury Services Specialist • p�1:?�.:�m.:1�':ji..idi�������1„i�i 903-255-183 7 office • Whitney has 14 years of banking experience including retail banking/customer service and 7 years in Treasury Management. She has been with Farmers Bank & Trust for 7 years. All monies which are deposited into the depository under the provisions of this proposal shall be continuously secured, in accordance with the laws of the State of Texas applicable thereto, by a valid pledge of par, exclusive of accrued interest, at all times at least equal to 102% of the amount of money on deposit in said several funds on deposit in the depository. In addition, the depository agrees to meet the same security pledge for all funds on deposit by the Paris Economic Development Corporation. All time deposits or certificates of deposits which have not elapsed on the termination date of the finally approved depository contract, shall remain on deposit with the same depository under the same terms and conditions in effect during said contract until the date such time deposits have elapsed. Funds from Bond sales may be deposited in the City depository or placed in outside investments. The City of Paris reserves the right to accept or reject any or all bids, to waive formalities, and to accept the bid the City considers the most advantageous. The City also reserves the right to place or invest part or all of its surplus or excess funds outside the designated depository, in any manner permitted by law, from time to time throughout the term of the contract. The undersigned bank official represents that he is authorized by the Bank's Board of Directors to sign this document and legally obligate the Bank to the terms stated in this agreement. NAME OF BANK Farmers Bank & Trust BY:,....� _....._... 00 TITLE: Market President DATE: February 20, 2023 5 1 P a g e